Vicinity Centres preliminary asset valuations as at 31 December 2021, indicate a $309 million, or 2.2%, uplift in book values (representing 7 cents per security) and 13 basis point tightening of the weighted average capitalisation rate to 5.35%.
Mr Grant Kelley, CEO and Managing Director, said: “We are very pleased to see our preliminary asset valuations increase amid a buoyant capital transaction market and a resilient underlying retail sector.
“DFO valuations continue to grow as tightening capitalisation rates and income growth highlight the strength of our DFO portfolio and its resilience through cycles. Vicinity is the market leader in the Outlet category, having consolidated our leadership position with the acquisition of a 50% interest in Harbour Town Premium Outlets on the Gold Coast, in November 2021. In addition to attracting value conscious shoppers year-round, DFOs play a key role in retailer sales channels, particularly as a means to manage inventory levels.
“Our Regional and Sub Regional assets have benefited from strong transactional evidence which was supported by the sale of our 50% interest in Runaway Bay, at an 18% premium to book value.
“Retailer demand for flagship stores in our CBD centres remained strong throughout the pandemic, despite the subdued visitation and trading environment. Pleasingly, our CBD portfolio recorded a modest uplift in valuations over the period, supporting our view that the outlook for CBD retail is improving and these centres will return to their former vibrancy over time.”
Independent valuations are being undertaken for 36 assets (74% of the portfolio by value), while the remaining 24 assets are subject to internal valuations.
December 2021 valuations are subject to finalisation and external auditor review, and will be confirmed in
Vicinity’s FY22 interim results on 16 February 2022.
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